Texas Capital Bancshares, Inc. · NASDAQ:TCBI
Texas Capital Bancshares — Q1 2022 Earnings Presentation
19 slides from Texas Capital Bancshares's earnings presentation, Apr 20, 2022
Slide 1: Q1-2022 Earnings
Q1-2022 Earnings April 20, 2022 © 2022 Texas Capital Bank Member FDIC
Slide 2: Forward-looking Statements
Forward-looking Statements This communication contains “forward-looking statements” within the meaning of and pursuant to the Private Securities Litigation Reform Act of 1995 regarding, among other things, our financial condition, results of operations, business plans and future performance. These s
Slide 3: Our Distinct Opportunity
Our Distinct Opportunity Serving strong core Texas markets with expanded coverage and a complete set of capabilities Improving client relevance and diversifying our revenue base Attracting high-quality talent with significant experience Operating from a de-risked position of financial strength 3
Slide 4: Strategic Performance Drivers Announced September 1st
Strategic Performance Drivers Announced September 1st Where We Where We Where We Where We Started Are Going Started Are Going Income Statement 2020 2021 Q1 2022 2025 Balance Sheet 2020 2021 Q1 2022 2025 Investment Banking and Trading FY Average Liquidity Assets4 2.5% 2.8% 2.1% ~10% 28% 37% 35% >20%
Slide 5: Our Path Forward
Our Path Forward Operating Model Aligned to our Clear Strategic Direction and Committed to Financial Resilience Vision, Grounded in our Values Fortitude to Deliver Organized Around Client Delivery Expanding Coverage Risk Management Product & Industry Specialization Business Banking Granular Ri
Slide 6: New Products and Services
New Products and Services Recent Progress Upcoming Milestones v Steady growth in core operating deposits continues; Treasury Product Zelle payment solutions for small business and consumer clients in market Treasury Fees up 33%, YoY during Q2 2022 Solutions Internally developed, digital Commer
Slide 7: Expanding Coverage
Expanding Coverage Recent Progress Segment specific credit underwriting is working – defined risk appetite, efficient underwriting, and informed decisioning Business Successfully adding banking, treasury solutions, and credit talent Banking Banking leadership now in place in each of our five T
Slide 8: Focused on the Future
Focused on the Future Current Investment // Re-aligning the Revenue Growth // Growing top- Building Tangible Book Value // expense base to directly support the line revenue as a result of expanded Reinvesting organically generated Financial business and investing aggressively banking capabilities fo
Slide 9: Financial Performance
Financial Performance Net income to common of $35.3 million, or $0.69 per diluted share Financial Highlights ($M) Q1 2021 Q4 2021 Q1 2022 Market-driven contraction in Mortgage Finance Loan balances resulted Net Interest Income $194.8 $194.0 $183.5 in modest declines in quarterly and YoY net inte
Slide 10: Loan Portfolio
Loan Portfolio Period End Loan Trends (excl. PPP) Utilization Rates10 61% 50% 59% LTM Average 57% $10.5B $11.0B 55% $9.3B $9.9B $8.9B 53% $5.8B $5.6B $5.2B 51% $4.8B $4.9B 49% 50% 47% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 C&I Loans7 Real Estate Loans Average
Slide 11: Deposits and Fundings
Deposits and Fundings Average Deposit Trends Composition of the funding base continues Q1 2022 EOP to show improvement $32.1B $32.9B $33.5B $32.0B $30.1B $30.6B DDA deposits comprise 53% of total $28.1B $25.4B deposits, compared to 45% a year ago $12.2B $13.2B $14.4B $15.1B $15.4B $15.8B $14.2B
Slide 12: NII Sensitivity
NII Sensitivity Standard Model Assumptions Loan Repricing Detail // Excl. MFLs11 The asset sensitivity profile of the bank 100bp & 200bp Parallel Shocks ($15.9B of Gross LHI Excl. MFLs11) Q1 2022 has increased over the last year as loans Loan Balances: Static began rising off floors in Q1 and ov
Slide 13: Q1-2022 Earnings Overview
Q1-2022 Earnings Overview Net Interest Income Net Interest Margin $5.4M $0.9M $0.0M -$0.0M 2.27% 2.23% -$1.3M 2.19% 2.22% -$15.5M 2.11% 2.12% 2.04% 2.02% $194.0M $183.5M Q4 2021 Loan Volume Loan Yield Loan Fees Investment Deposits Borrowings Q1 2022 Securities & Cash Non-Interest Income Fee Income D
Slide 14: Q1-2022 Earnings Overview
Q1-2022 Earnings Overview Non-interest Expense Regulatory Capital Levels Expense base is reinvested and repositioning to support revenue 1.5x $150.3M $153.1M Medium-term production $146.6M 0.8x $1.2M 1.1x CET1 Target 12% $18.1M 15.68% Increased front-line talent by over $53.0M 35% 14.04% 60% sin
Slide 15: Full Year Guidance
Full Year Guidance Full Year 2022 Guidance Prior Guidance Current Rate Assumptions in Full Year Guidance Mortgage Finance volumes are inclusive of the forward Average MFLs11 Decline High-teens % Decline Mid 30s% Decline curve as of 3/31/2022 All other guidance excludes rate changes MFLs11 Yields
Slide 16: Appendix // Footnotes
Appendix // Footnotes 1. Total Revenue in 2020 and 2021 excludes Correspondent Lending; See slide: Appendix // Correspondent Lending Historical Contribution 2. Non-interest Income for 2020 and 2021 excludes Correspondent Lending; See slide: Appendix // Correspondent Lending Historical Contribution 3
Slide 17: Appendix // Loan Fees and PPP
Appendix // Loan Fees and PPP Loan Fees (excl. PPP) PPP Loans PPP Fees Yield on PPP Loans (excl. Fees) LHI Yield NIM Loan Fees (excl. PPP) Contribution Contribution $5.1M Q1 2021 $7.6M 0.20% 0.08% $3.4M $2.8M Q2 2021 $8.2M 0.22% 0.09% $1.7M 0.98% 0.97% 0.95% 0.93% Q3 2021 $8.6M 0.22% 0.10% Q2 2021 Q
Slide 18: Appendix // Correspondent Lending Historical Contribution
Appendix // Correspondent Lending Historical Contribution Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 ($M) Net Interest Income 24.5 1.5 2.8 1.4 30.2 0.9 0.3 0.0 0.0 1.2 Non-interest Income Brokered Loan Fees 2.6 2.8 5.8 3.9 15.1 2.2 0.7 0.0 0.0 2.9 Servicing Incom
Slide 19: Appendix // Return on Average Tangible Common Equity (ROTCE)
Appendix // Return on Average Tangible Common Equity (ROTCE) ROTCE is a non-GAAP financial measure. ROTCE represents the measure of net income available to common shareholders as a percentage of average tangible common equity. ROTCE is used by management in assessing financial performance and use of
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